Three Working Days to Decide: RBI's Key Facts Statement Rules for Bengaluru Home Loan Borrowers
RBI's 2024 Key Facts Statement circular covers new retail loans from 1 October 2024: an APR with all charges, an amortisation schedule, at least three working days to accept, and no fees outside the KFS without consent. What Bengaluru home loan borrowers should check before signing.
The sanction letter arrives on a Friday evening, the builder wants the first disbursal request by Monday, and the bank's relationship manager says the paperwork is "standard". A Bengaluru buyer in that position has one document that cuts through the rush: the Key Facts Statement. Since RBI's rules took effect for new retail loans, the lender has had to put the loan's real cost on a single sheet, explain it, and give you time to think before you accept.
The short answer. RBI's circular on the Key Facts Statement for loans and advances, dated 15 April 2024, applies to all new retail and MSME term loans sanctioned on or after 1 October 2024. It requires a KFS with an Annual Percentage Rate computation sheet and an amortisation schedule, in a language the borrower understands, gives the borrower at least three working days to accept the terms for loans with a tenor of seven days or more, and says fees and charges not mentioned in the KFS cannot be charged during the term of the loan without the borrower's explicit consent. The trade-off: reading the KFS properly takes an hour you may feel you do not have, but it is the one document that lets you compare offers on a like for like basis before you are locked in.
What is the Key Facts Statement, and when do you get it?
It is a standardised summary of your loan, issued before you sign. RBI's KFS circular, numbered RBI/2024-25/18, requires lenders to provide a KFS for all new retail and MSME term loans sanctioned on or after 1 October 2024, including fresh loans to existing customers. A home loan sanctioned today falls within it.
The circular sets out what the KFS must contain: a unique proposal number, a computation sheet of the Annual Percentage Rate, and the amortisation schedule of the loan over its tenor. A summary box with the key facts must also be included in the loan agreement itself.
We have compared offers using the APR before in our guide to using the KFS and APR to compare home loans. This piece focuses on your rights around the document: time to decide, language, and what cannot be added later.
How long do you have to accept the loan terms?
At least three working days for a home loan. The circular says the validity period of the KFS, meaning the period the borrower has to agree to the terms, shall be at least three working days for loans with a tenor of seven days or more, and one working day for loans with a shorter tenor.
That period exists so that you can read, ask questions and compare. If you are pressed to sign the same day, you can point to the KFS validity period and take the time the rules allow. A builder's disbursal deadline is between you and the builder; the lender's offer remains open for its stated validity.
Use the time well. Put the KFS next to any competing offer, and compare the APR figure, not just the headline interest rate. Then check the fees section line by line against what the relationship manager told you. If you are still deciding between a fixed and a floating rate, our explainer on fixed versus floating home loans can help you read that part of the offer.
| KFS rule | What RBI's circular says | What a Bengaluru borrower should do |
|---|---|---|
| Coverage | New retail and MSME term loans sanctioned on or after 1 October 2024 | Ask for the KFS before signing any loan agreement |
| Contents | APR computation sheet and amortisation schedule | Compare APRs across lenders, not just rates |
| Validity | At least three working days for tenors of seven days or more | Take the time to read and compare |
| Language | In a language the borrower understands, explained, acknowledged | Ask for explanation of any line you do not follow |
| Undisclosed fees | Not chargeable without the borrower's explicit consent | Keep the KFS to check every later charge |
What does the APR include?
All charges the lender levies, not only interest. The circular defines APR as the annual cost of credit to the borrower, which includes the interest rate and all other charges associated with the credit facility. Charges that the lender recovers from you on behalf of third parties at actual cost, such as insurance or legal fees, also form part of the APR and must be disclosed separately.
That is why two loans with the same headline rate can have different APRs. A higher processing fee, a bundled insurance premium or a larger legal fee will show up in the APR. Comparing APRs is the closest you can get to comparing the true cost of two offers.
If a charge you were told about does not appear in the APR computation, ask why. If a charge appears that you were not told about, ask what it is for before you accept.
Can the lender add fees later that are not in the KFS?
Not without your explicit consent. The circular says fees and charges which are not mentioned in the KFS cannot be charged by the lender to the borrower at any stage during the term of the loan without the explicit consent of the borrower.
Keep your KFS with your loan papers for the life of the loan. If a new charge appears on a statement years later, the KFS is the document you will compare it against. Write to the lender citing the KFS and ask for the basis of the charge.
Other RBI rules work alongside this one. RBI's Pre-payment Charges on Loans Directions, 2025 say the applicability of pre-payment charges must be clearly disclosed in the sanction letter, the loan agreement and the KFS where required, and that undisclosed pre-payment charges shall not be levied. For floating rate loans to individuals for non-business purposes sanctioned or renewed on or after 1 January 2026, those Directions say no pre-payment charges shall be levied at all.
What if you do not understand the KFS?
Ask, and expect an explanation. The circular requires the KFS to be in a language understood by the borrower. It also says the contents of the KFS shall be explained to the borrower and an acknowledgement obtained that the borrower has understood it.
That acknowledgement is a signature you should give only after the explanation, not before. If a term is unclear, such as how the floating rate is linked to its benchmark or what happens at a reset, ask the lender to explain it and, if needed, to put the answer in writing.
RBI's circular on reset of floating interest rates adds a related duty at sanction: lenders must clearly communicate to borrowers the possible impact of a change in the benchmark rate on the loan, leading to changes in EMI, tenor or both. The KFS conversation is the right moment to ask about it.
How should you read the amortisation schedule?
As a map of where each EMI goes. The circular requires the KFS to include the amortisation schedule of the loan over its tenor. Early in a home loan, a larger share of each EMI goes to interest; later, more goes to principal. Seeing that split helps you plan part prepayments and understand how much of the loan remains at any point.
Check that the schedule uses the rate, tenure and loan amount in the KFS. If you have chosen a tranche-based disbursal for an under-construction flat, ask how the schedule will be updated as each tranche is released, so you know what to expect before full EMIs begin.
Finally, compare the schedule with the quarterly statements you receive later. RBI's reset circular requires lenders to share a quarterly statement showing principal and interest recovered to date, the EMI amount, the number of EMIs left and the annualised rate for the tenor. Together, the KFS schedule and those statements let you track your loan without guesswork.
What should Bengaluru borrowers check in a KFS before signing?
Use this checklist when the KFS reaches you:
- Confirm the KFS carries a unique proposal number and the loan amount you applied for.
- Read the APR figure and compare it with every other offer you have.
- Check the APR computation for each fee, including insurance and legal charges.
- Ask for any term you do not understand to be explained before you acknowledge.
- Check the pre-payment line and the floating rate benchmark and reset terms.
- Use the validity period, at least three working days, to compare offers calmly.
- Keep the KFS for the life of the loan to check any later charge against it.
If the lender cannot give you a KFS, or asks you to sign before you have one, treat that as a reason to pause. The rule is designed to put the cost of the loan in front of you before the commitment, not after.
Bengaluru borrower FAQs on the Key Facts Statement
Which home loans need a Key Facts Statement?
RBI's circular dated 15 April 2024 requires lenders to provide a Key Facts Statement for all new retail and MSME term loans sanctioned on or after 1 October 2024, including fresh loans to existing customers. A home loan sanctioned today is a retail term loan covered by these instructions.
How many days do I get to accept a home loan offer?
RBI's KFS circular says the validity period of the Key Facts Statement shall be at least three working days for loans with a tenor of seven days or more. A home loan falls in that category, so you have at least three working days to agree to the terms after receiving the KFS.
Can my lender charge a fee that is not in the KFS?
RBI's KFS circular says fees and charges not mentioned in the Key Facts Statement cannot be charged by the lender at any stage during the term of the loan without the explicit consent of the borrower. Keep your KFS and compare any new charge on your statement against it.
Does the APR include insurance and legal fees?
Yes. RBI's KFS circular says the Annual Percentage Rate includes the interest rate and all other charges associated with the credit facility, and that charges recovered on behalf of third parties at actual cost, such as insurance or legal fees, form part of the APR and are disclosed separately.
Last updated 2026-10-23. PropNewz Team.
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